Running a small business is a dream come true for many. It can be personally rewarding and economically rewarding, but it also can be tough at times. Every business is subject to ups and downs, but small businesses feel them more. The best financial management advice for small business owners is to enjoy the good times but make a plan to weather the bad. Besides the obvious safety net of purchasing Orlando Commercial Insurance, here are three tips to remain financially sound.
Don’t Proceed Without a Budget
Running a business without a budget is like jumping from an airplane without a parachute (not smart.) Budgeting requires time and number crunching, but in the long run it will keep you on track during financial highs and lows. A budget is like a financial advisor, only you don’t have to pay each time you consult it. The more care you put into crafting a budget, the more useful it will be in guiding your financial decisions.
Be Conservative, Especially in the Early Years
You’re a business owner. You’re the boss. You deserve a luxurious company car, tailored suit, and a high-end espresso machine, right? You may deserve these luxuries, but resist the temptation to splurge on them. Don’t overextend your finances with non-essential expenses. Save that money and create a cushion to get you through the lean months. According to the Financial Accounting Standards Board, most small businesses are operating with precariously insufficient cash reserves on hand.
Increase Your Payroll Only as Needed
To remain financially healthy, your mantra (in the beginning anyway) should not be “Why do what I can hire someone else to do?” It should be “Why hire someone to do what I can do?” Even if your employees are paid minimum wage, they come with indirect costs. Depending on your business, they’ll need a uniform, computer, vehicle, desk, company cell phone … it all adds up. Why take on these expenses until you really need to?
Running a business is tough. There’s one challenge we can take care of for you: all of your insurance needs. Call us at Newman Crane & Associates Insurance, (407) 859-3691 for a quote on comprehensive, affordable, quality small business insurance.